K2 Infragen Ltd — Q4 FY26 earnings call

Call held 27 May 2026

Management summary

K2 Infragen Limited reported strong FY26 revenue and EBITDA growth of 26% and 25% respectively, driven by healthy execution and diversification. The company secured significant new orders and is strategically shifting towards direct government contracts and higher-margin railway and power projects. While H2 margins faced pressure from raw material costs, working capital management improved, and the company aims for positive cash flow and continued growth in FY27.

Highlights

  • Revenue from operations for FY26 grew 26% year-on-year to approximately Rs. 185 crores.

  • EBITDA for FY26 grew 25% year-on-year to approximately Rs. 26 crores, with a healthy margin of 12.5%.

  • New orders worth approximately Rs. 412 crores were secured since December 2025, primarily in higher-margin segments like energy, transmission & distribution, railway, and renewable infrastructure.

  • Days Sales Outstanding (DSO) improved from 323 days last year to 274 days, indicating better working capital management.

  • The company maintained an on-time project delivery rate of approximately 83% during FY26.

Concerns

  • H2 FY26 EBITDA margin compressed to ~10% from the full-year average of 12.5%, and PAT margin to 6.4% from 7.2%.

  • Operational efficiency in H2 was impacted by geopolitical situations and raw material price increases (bitumen, diesel).

  • Cash flow remained negative at Rs. 16-17 crores for FY26, although it improved from negative Rs. 42 crores last year.

  • A mathematical discrepancy in the reported interest cover (0.25x) was noted, despite stated EBITDA of Rs. 24 crores and interest cost of Rs. 6 crores (which implies 4.0x).

Key financials

2 periods

H2

  • FY26 Revenue
    ₹94 Cr
  • FY26 EBITDA
    ₹9 Cr
  • FY26 EBITDA Margin
    10%
  • FY26 PAT
    ₹6 Cr
  • FY26 PAT Margin
    6.4%

FY26

  • Revenue
    ₹185 Cr
    YoY +26%
  • EBITDA
    ₹26 Cr
    YoY +25%
  • EBITDA Margin
    12.5%
  • PAT
    ₹13.33 Cr
  • PAT Margin
    7.2%

What they filed

Q4 FY26: revenue up 91.8%, net profit up 0.0% against the same quarter last year.

₹ Cr · quarterly
Line itemQ4 FY23Q2 FY24Q4 FY24Q2 FY25Q4 FY25Q2 FY26Q4 FY26
Revenue60 59 49 51 95 +58%91 +54%94 +92%
EBITDA18 10 11 7 11 −39%14 +40%9 −18%
Net profit12 6 6 4 7 −42%7 +17%6 +0%
How to read this

₹ crore, as filed. The percentage beside a figure is the change against the same quarter a year earlier — never the quarter before, which would make every seasonal business look like it collapses and booms each year.

Order book

high confidence

Total value

₹424 Cr

as of 2026-03-31 quantified

Inflow this quarter

₹412 Cr

Execution

On-time project delivery rate of approximately 83% during FY'26

Composition

Mix 5 segments
  • Energy, Transmission & Distribution, Railway, Renewable ₹412 Cr 39.5%
  • Railway (PSI projects) ₹222 Cr 21.3%
  • Railway (total with GST) ₹262 Cr 25.1%
  • Power Transmission (RRVPNL) ₹57 Cr 5.5%
  • Transformer projects ₹90 Cr 8.6%

Share of order book by segment, derived from disclosed amounts

Pipeline

L1 awaiting loa

Live bid pipeline across roads and railway sector

Order momentum has strengthened significantly, with a strategic shift towards direct government contracts and higher-margin segments like power transmission and railway, providing strong revenue visibility.

Source: Prepared remarks

Capital allocation

high confidence
  • Capex Capex disclosed
    • Adding more construction machines
    • Acquisition of land for 2MW solar plant
    In the last year also we did around, taken a 120 metric tonne bitumen plant in the Gazipur project and this year also we have some plan to add on the machines. We already have more than 64 machines but we are trying to add more machines and we are generating the capital. Even in the very recent for our 2 megawatt plant we have acquired 8 acres of land also.
  • Liquidity Cash ₹50 Cr Cash flow improved from negative Rs. 42 crores last year to negative Rs. 16-17 crores this year. Company has over Rs. 50 crore in fixed deposits. Received comfort letter from Kotak for Rs. 273 crores for a HAM project, and Union Bank also confirmed support for SPV financing.
    I am not mentioning that we are cash flow positive but we are secured enough... we have a FD in house of more than Rs. 50 crore today... we got the comfort letter from Kotak of Rs. 273 crores... Union Bank has confirmed that, okay, we are ready with that.

Guidance & targets

Revenue

  • Revenue Growth Revenue · FY27 · High confidence >25%
    The growth that we are expecting for FY'27? We will be maintaining more than 25% anyhow. That is what the standard we are maintaining since last three years, and it will be maintained for that.

    — Pankaj Sharma

Margin

  • EBITDA Margin Margin · FY26 · Medium confidence 13-14% range
    If you are still calculating, so we are in the range of 13%, 14%, so we are not far from that, we are within 13%, 14%, I do not remember the number in exact point.

    — Pankaj Sharma

Operational Efficiency

  • On-time Project Delivery Rate Operational Efficiency · This year · High confidence 83-90%

    Previously 83% → 83-90%

    That 83% of the delivery time is planned versus the actual 83%. So, we are targeting that in this year, let us take 83 to 90 plus.

    — Pankaj Sharma

Corporate Strategy

  • Main Board Listing Corporate Strategy · Mid-2027 or Jan'28 · High confidence Main Board

    From SME Board today

    We are on the SME board for a few more months or for a few years. We are going to enter the main board... In a year and a half we are expecting, in mid of 2027 or January'28 we will be on the main board.

    — Pankaj Sharma

Shareholding

  • Promoter Holding Shareholding · Progressively · Medium confidence Increase more
    I will talk progressively that we keep on increasing our shareholding and the biggest thing is that the talk about 40%, that is promoter oriented, means in the beginning of the company, the shareholder was 15, five have become promoter out of that, so you can understand this, so promoter holding will increase more.

    — Pankaj Sharma

Market context

  • Cash Flow Positivity Cash Flow · Soon / Next half yearly results · Medium confidence Positive

    From Negative Rs. 16-17 crores today

    It will be improving and I think in the next half yearly results you will find that we will try to be on a positive side and very soon we will be reaching there because producing from 43 to you can say, in a year if we have reduced more than what you call it Rs. 25 crores so I think remaining Rs. 17 crores will be taken care of.

    — Pankaj Sharma

What to watch in Q1 FY27

FY27 Revenue Growth

FY27
Current FY26 Revenue Growth 26% YoY
Target >25% YoY

Why it matters

To verify if the company can sustain its growth momentum as guided, especially with the strategic shift towards direct government contracts and higher-margin segments.

The growth that we are expecting for FY'27? We will be maintaining more than 25% anyhow.

Risks & concerns

  • Geopolitical situation and raw material price volatility

    high

    H2 operational efficiency and margins were impacted by increased bitumen and diesel prices due to the war situation, especially for road-oriented projects.

    Both acknowledged

  • Government payment delays

    medium

    Analyst highlighted issues with government entities having outstanding payments; management stated mitigation through direct contracts and annuity-based models (HAM, TBCB) with defined payment terms.

    Analyst acknowledged

  • Income Tax Investigation

    medium

    Management referred to an income tax issue as an 'accident' that is 'insured and passed on' without providing specific details, which could be a red flag for governance.

    Analyst downplayed

  • Mathematical discrepancy in reported interest cover

    low

    Despite stating EBITDA of Rs. 24 crores and interest cost of Rs. 6 crores (implying 4.0x), management agreed to an analyst's calculation of 0.25x for interest cover.

    Both not addressed

Q&A highlights

6 direct, 1 evasive
H2 Margin Compression & Raw Material Impact Direct
Overall ratio on the road side, it was around 77%. And that is the basic reason where, because of which, you can see that operational efficiencies are down because all the rates of bitumen and the diesel prices have gone up from the February mid onward. And that has impacted overall the scenario.

Management explained the significant drop in H2 margins was due to external factors like geopolitical situation and rising raw material costs, particularly affecting road projects.

Asked by Disha from Sapphire Capital

Shift to Direct Government Contracts and Higher-Margin Segments Direct
As company is getting, company has reported that more than Rs. 400 crore we got in order related to the power transmission and the railway, which has a higher margin than compared to roads. So, we are very bullish about it, that going forward, this will support the overall economics of the company.

Highlights a strategic pivot towards higher-margin segments (power transmission, railway) and direct government contracts, expected to improve overall profitability and reduce exposure to volatile raw material costs.

Asked by Disha from Sapphire Capital

Order Book Visibility and FY27 Growth Outlook Direct
We have an order pipeline. As I mentioned to you, that Rs. 500 crore has already been bidded. We are waiting for the result. So, and the chances are high. I will say that Rs. 400 crore has already been unexecuted with us today... The growth that we are expecting for FY'27? We will be maintaining more than 25% anyhow.

Provides concrete numbers for the bidding pipeline and unexecuted order book, offering strong visibility for future revenue, and sets a clear growth target of over 25% for the next fiscal year.

Asked by Disha from Sapphire Capital

Working Capital Management and Cash Flow Improvement Direct
If you compare last year to this year our DSO was 323 has come to 270. And it is being reduced... our cash flow has improved much from the last financial year. So, we are on a year-on-year increase, improving our cash flow like anything... from minus 43 it becomes minus 17.

Addresses a critical concern for construction companies (working capital and cash flow). Management demonstrated improvement in DSO and a reduction in negative cash flow, indicating better operational efficiency.

Asked by Saket Kapoor from Kapoor and Company

Income Tax Investigation and Risk Mitigation Partial
On the income tax part, I will give only one liner that all the, you can say reports and appraisal reports and everything will be, we are ready for the answers but there is nothing there. There are few accidents which you cannot avoid it being in business. My liner is that, that was an accident and now everything has been insured and passed on.

An analyst raised a potential red flag regarding a governance issue. Management's brief response, while attempting to downplay it as an 'accident' that is 'insured and passed on,' lacked specific details, leaving some ambiguity.

Asked by Sanjay Mallik from Chompi Enterprise

Interest Cover Discrepancy Evasive
Priyanka Pareek: If I talk about the exact, like today we are sitting somewhere, the interest cost is somewhere around Rs. 6 crores. And if I talk about the EBITDA amount, it is somewhere around 24. So, you make, it is somewhere around... Sanjeev Pandya: So, so interest cover would be therefore 0.25, right? Priyanka Pareek: Yes, yes.

A clear mathematical discrepancy was noted in the transcript regarding the interest cover calculation (EBITDA of Rs. 24 crores and interest cost of Rs. 6 crores implies 4.0x, not 0.25x). Management's agreement to the incorrect figure raises questions about attention to detail or transparency.

Asked by Sanjeev Pandya from Lancer's Impex Private Limited

Bank Support and SPV Financing for HAM Projects Direct
We have recently bidded one HAM, okay, and we got the comfort letter from Kotak of Rs. 273 crores... Yes, SPV financing, we have not, again, when I am mentioning you the HAM and that comfort letter, that is again the SPV model only because that type of, still we are not in that type of credential that we can bid up to Rs. 400 crores.

Confirms strong bank support for new HAM projects and the use of SPV financing models, which are crucial for funding large infrastructure projects and improving the company's financial structure.

Asked by Sanjeev Pandya from Lancer's Impex Private Limited

Promoter Shareholding Increase Direct
I will talk progressively that we keep on increasing our shareholding and the biggest thing is that the talk about 40%, that is promoter oriented, means in the beginning of the company, the shareholder was 15, five have become promoter out of that, so you can understand this, so promoter holding will increase more.

Addresses a specific investor concern about promoter holding, with management indicating a commitment to increasing it, which can be a positive signal for investor confidence.

Asked by Darshan Chandra

2 min read 6 chapters

Detailed narrative

FY26 Financial Performance Overview

K2 Infragen Limited reported a robust financial year 2026, with revenue from operations growing 26% year-on-year to approximately Rs. 185 crores. EBITDA for the full year stood at Rs. 26 crores, reflecting a 25% growth year-on-year, maintaining a healthy EBITDA margin of 12.5%. Profit after tax for FY26 was Rs. 13.33 crores, translating to a PAT margin of 7.2%, supported by healthy execution and diversification across infrastructure segments.

H2 FY26 Performance and Margin Impact

The second half of FY26 saw revenue from operations at approximately Rs. 94 crores, largely stable year-on-year. However, H2 EBITDA was Rs. 9 crores, with a margin of 10%, and PAT was Rs. 6 crores, with a margin of 6.4%. Management attributed the H2 margin compression to the impact of geopolitical situations and rising raw material prices, particularly bitumen and diesel, which affected the predominantly road-oriented projects, leading to a strategic slowdown in execution.

Strategic Shift to Direct Government Contracts and Higher-Margin Segments

The company is actively transitioning from sub-contractor execution to securing direct contracts from government entities like KPTCM, RRVPNL, and NWR. This strategic shift is expected to enhance margins, execution visibility, and long-term scalability. New orders worth approximately Rs. 412 crores since December 2025, primarily in power transmission, railway, and renewable energy, are anticipated to yield higher margins compared to road projects, which are more susceptible to raw material price volatility.

Order Book and Bidding Pipeline

K2 Infragen's total project value stands at approximately Rs. 662 crores, with Rs. 424 crores remaining unexecuted, providing strong revenue visibility. The company also has a live bidding pipeline of approximately Rs. 500 crores across the roads and railway sectors, with management expressing high confidence in converting a significant portion into firm orders. Recent wins include Rs. 57 crore from RRVPNL for grid substations and Rs. 222 crore (excluding GST) for railway projects, where K2 is the lead partner with a 74% share.

Working Capital and Cash Flow Management

The company demonstrated improved working capital management, with its Days Sales Outstanding (DSO) reducing from 323 days last year to 274 days. While cash flow remained negative, it improved significantly from negative Rs. 42 crores last year to negative Rs. 16-17 crores this year. Management highlighted having over Rs. 50 crore in fixed deposits and strong bank support, including a comfort letter for Rs. 273 crores from Kotak for a HAM project, and confirmed support from Union Bank for SPV financing, indicating robust liquidity and financial backing.

Future Outlook and Growth Initiatives

K2 Infragen aims to maintain over 25% year-on-year revenue growth for FY27, driven by expanding execution capabilities and strengthening its presence in high-growth industrial sectors. The company is exploring opportunities under the tariff-based competitive bidding (TBCB) and hybrid annuity model (HAM) to build stable, annuity-based revenue streams and enhance order book predictability. Management expects to transition from the SME board to the main board by mid-2027 or January 2028, which could enhance liquidity and access to a broader investor base.

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